Business24 Newspaper 16th December, 2020

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WEDNESDAY DECEMBER 16, 2020

NO. B24 / 140 | NEWS FOR BUSINESS LEADERS

Q3 GDP to signal recovery

WEDNESDAY DECEMBER 16, 2020

GNPC sold US$5.2bn of oil since 2011-Apr 2020

By Benson AFFUL affulbenson@gmail.com

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he Ghana National Petroleum Corporation (GNPC) sold 73 cargos of oil, made up of 71.1 million barrels valued at US$5.2bn, between 2011 and April 2020, the Natural Resource Governance Institute (NRGI) has said in a new report.

The report, titled “Ghana’s Oil Sales: Using Commodity Trading Data for Accountability”, Cont’d on page 3

Non-banks asked to place corporate governance at core of business

By Patrick Paintsil

By Nii Annerquaye Abbey annerquaye@gmail.com

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he Ghana Statistical Service (GSS) will today release data on the economy’s third quarter performance, which is expected to signal the much-

needed post-Covid-19 recovery.

The economy struggled under the weight of the pandemic in the first six months of the year, with the GSS reporting a 3.2 percent contraction of GDP in the second quarter.

According to Courage

ECONOMIC INDICATORS EXCHANGE RATE (INT. RATE)

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Martey, a senior economist with investment banking firm Databank, the economy is set to respond positively to the easing of government-imposed restrictions to curb the spread of the virus.

BRENT CRUDE $/BARREL

POLICY RATE

14.5%

NATURAL GAS $/MILLION BTUS

GHANA REFERENCE RATE

15.12%

GOLD $/TROY OUNCE

OVERALL FISCAL DEFICIT

11.4% OF GDP

PROJECTED GDP GROWTH RATE AVERAGE PETROL & DIESEL PRICE:

0.9% GHC 5.13

M

icrofinance expert and Executive Director of Microfin Consult, Ishmael Kwesi Otchere, has advised players of the non-bank financial sector to place corporate

Cont’d on page 2 INTERNATIONAL MARKET

USD$1 =GHC 5.7027

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CORN $/BUSHEL COCOA $/METRIC TON COFFEE $/POUND:

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$41.26 2.622 1,922.57 329.50 $2,339.27 $109.65

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Editorial / News

WEDNESDAY DECEMBER 16, 2020

Editorial

Good one on listing rice contracts

T

he Ghana Commodity Exchange on Monday added locally-produced rice to the number of commodities traded on its electronic trading platform following the approval by the Security and Exchange Commission.

The move is expected to boost local rice production and consumption as government works to put a moratorium on rice importation by 2022.

Rice has become the most consumed food staple in the country after maize. The country’s annual rice import bill, which is about 50 percent of rice consumed, currently stands at about US$1 billion, mainly to complement the consumption gap left by domestic production.

GCX has so far listed five commodities namely: maize, soya bean, sorghum and sesame contracts.

It is estimated that about 1.2 million metric tonnes of rice would be produced in the 2020/21 harvest year. However, just about 750,000 metric tonnes were produce during 2019 crop season.

This paper shares in the view of the President of the Ghana Rice lnterprofessional Body (GRIB), Nana Adjei Ayeh II who believes the of launch rice trading through the Exchange will be of immense value to the Ghanaian rice farmers.

Indeed, the addition of rice to the list of contracts traded on the GCX would increase marketing opportunities for rice

farmers as well as address postharvest loss issues and their lack of financing, which are key industry concerns.

It is also expected that the GCX Warehouse Receipt Financing Scheme will benefit rice farmers who can leverage their produce to obtain capital from banks at reasonable rates which can then be reinvested into their agribusiness ventures.

This paper would like to commend the management of the Ghana Commodity Exchange for the work done in setting up the exchange in the first place.

Indeed, the development of the agricultural value would not be complete without the payment of fair price to farmers for their produce – one of the problems to be tackled by the exchange.

Q3 GDP to signal recovery Continued from cover “I expect the Q3 GDP data to signal the start of the mediumterm journey to the post-COVID recovery. In other words, I expect the overall growth number to switch from the negative 3.2 percent recorded in the second quarter to a modest positive growth in Q3-2020.

The early and gradual reopening of the economy, in addition to the elections-driven push in public infrastructure spending, is being reflected in high frequency data as captured by the Bank of Ghana’s Composite Index of Economic Activity (CIEA),” he said.

The CIEA data released by the central bank during its last monetary policy meeting revealed a 10.5 percent expansion in September, compared with 4.2 percent growth a year ago.

The key drivers of economic activity during the period were construction activities, manufacturing, and credit to the private sector.

Mr. Martey said these real sector indicators suggest that economic activity is picking up

steadily and should translate into a quick return to the path of positive growth.

“However, I think the growth momentum would still be feeble and require continued fiscal and monetary support to hit potential growth rates.

Against this backdrop, I won’t be surprised to see growth rates anywhere between 1.5 percent to 2.5 percent in Q3-2020,” he predicted.

Another economist, Dr. Theo Acheampong, also expressed the confidence that growth in the third quarter will be positively impacted by the easing of restrictions since the second quarter of this year.

“I expect activity levels to have picked up significantly in Q3 following the easing of restrictions. The GSS Covid-19 business tracker showed some improvement in activity levels,” he told Business24.

Q2 slump The biggest slump in the second quarter GDP data occurred in the hospitality sub-sector, which fell by more than 79 percent. This

Prof. Samuel Kobina Annim, Government Statistician

was followed by the trade, repair of vehicles, and household goods sub-sector, which contracted by 20.2 percent.

Despite the overall contraction in GDP growth, Mr. Martey explained that government’s decision to ease restrictions earlier, compared to most African countries, may have prevented further damage.

Government has projected a growth target of under 2 percent for 2020, and a favourable third quarter performance would steer the economy further away from contraction and begin the post-Covid-19 path to economic growth.

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GNPC sold US$5.2bn of oil since 2011-Apr 2020 Continued from cover used publicly available data to show the importance of GNPC’s oil sales and the need for greater accountability, as the country faces the challenge of responding to Covid-19 and debt sustainability issues exacerbated by the pandemic.

The report said the impact of the coronavirus pandemic and oil price crash on Ghana’s economy means that ensuring GNPC maximises its oil sales revenues is more important than ever.

“Oil sales transparency on the part of GNPC and the government has been an important step toward enabling citizens groups to demand effective and accountable management of revenue flows.

Information on Ghana’s longterm sales contracts tied to resource-backed borrowing is especially important in the context of broader debt relief and renegotiation discussions,” said Nafi Chinery, West Africa Manager for NRGI, in a press release accompanying the report.

According to the report, GNPC has a long-term agreement, signed in 2017, to sell four cargos per year of oil from the country’s TEN field to Russian trader Litasco.

A second agreement, signed in 2012, obliges the state oil company to sell five cargos per year to Chinese state-owned Unipec Asia, tied to the Ghanaian government’s US$3bn loan agreement with China Development Bank.

These two deals alone generated 59 percent of the government’s total oil revenue for 2019.

The report urged government to disclose its long-term oil sales

agreements to further improve transparency, which it said is already high in Ghana.

“Our research demonstrates the importance of the government’s long-term sales contracts as a source of government revenues,” Denis Gyeyir, the report’s coauthor, said, adding that the precise terms within long-term sales agreements, such as those signed with Unipec Asia and Litasco, are very important in determining whether they represent a good deal for the country.

“We commend the government for its release of information on

the terms of the agreement with Unipec Asia, but officials should disclose the long-term sales contracts with both Unipec Asia and Litasco in their entirety, and commit to disclosing any future similar agreements,” he said.

The report said Ghana is one of the most transparent countries in reporting on its commodity trading activities, with GNPC, the Ministry of Finance, the Bank of Ghana, the Public Interest and Accountability Committee, and Ghana Extractive Industries Transparency Initiative all disclosing information on the state’s oil sales activities.

Non-banks asked to place corporate governance at core of business Continued from cover governance at the core of their business and invest in practical succession strategies that will ensure their sustainability.

According to him, such systems and processes give some level of deposit protection assurance to investors and clients, especially in these times that the coronavirus pandemic is causing shocks to businesses, including non-bank financial firms.

“One major issue confronting the banking sector has been that of governance; the idea that I founded or promoted the business, so I can be there forever, is persistent in the industry, but it doesn’t give any level of guarantee or sustenance to the institution,” he told Business24 in an interview at the seventh annual general meeting of Microfin Rural Bank held at Gomoa Pomadze in the Central Region.

“There should be wellfocused, well-planned strategies

or succession plan mechanisms that will build the confidence of both clients and shareholders when the founder of the business is no longer involved with it,” he added.

Mr. Otchere applauded the central bank for coming out with directives that mandate non-bank financial services providers to deploy strong corporate governance systems as a form of guarantee to their operations.

With the coronavirus pandemic shaping the way of doing business, the microfinance expert said specialised deposittaking institutions (SDIs) must employ digitisation in their operations, including strategies for deposit mobilisation and credit administration.

This, he said, must be accompanied with active financial, banking and digital literacy initiatives that will enable them carry their clients along on the digital journey.

“Every change has its challenges, but it is up to the banks to manage them. People still want to see physical cash; it is our responsibility to educate such persons to understand that

the traditional ways of doing business do not give an assurance of sustainability.”

As the critical sector that is spearheading the nation’s financial inclusion agenda, Mr. Otchere said SDIs must balance profit-making with the spirit of social sacrifice to better the lot of persons in the communities that they operate.

He said: “The investor needs returns, but in microfinance that aspect of improving the social and economic lives of people within the bank’s operational area is also very key.”

Mr. Otchere is stepping down as the executive director of Microfin Rural Bank, which he founded.

“I am very confident of the team that has been groomed to take over, should the current leadership retire. The bank has a very resilient team of directors who can still drive the social and economic aspirations of the bank, its clientele and the community at large,” he emphasised.

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WEDNESDAY DECEMBER 16, 2020

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News

WEDNESDAY DECEMBER 16, 2020

Ghana rice listed on GCX

By Joshua Worlasi Amlanu macjosh1922@gmail.com

Rice production

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he Ghana Commodity Exchange on Monday added rice contracts [Ghana rice] to the number of commodities traded on the electronic trading platform following the approval by the Security and Exchange Commission.

The move is expected to boost local rice production and consumption as government works to put a moratorium on rice importation by 2022.

GCX has so far listed five commodities namely: maize, soya bean, sorghum and sesame contracts.

“The exchange aims to standardise rice trading in Ghana with its grading system to enable buyers and sellers appropriately judge the quality of the produce they trade. These innovations give farmers the chance to further enhance the value of their produce and make it a much more attractive option on both the local and international market,” Mrs. Tucci Goka Ivowi, CEO of the Exchange said at the launch of the rice trading.

the president of GRIB said.

On the first trading day, rice contracts were sold at GH¢5,140 per tonne.

Ringing of Bell to signal start of Trading of Ghana Rice

She further stated that the exchange has worked with rice market actors to deliberate on dynamics that occur in trading rice and ensure that all considerations to ensure the most efficient methods for trading rice on the Exchange are taken into account.”

The President of Ghana Rice lnterprofessional Body (GRIB), Nana Adjei Ayeh II said the launch rice trading through the Exchange

will be of immense value to the Ghanaian rice farmers.

“We know what trading through GCX guarantees for the farmer in terms of quality, transparency, and most importantly, timely payment. The addition of rice to the list of contracts traded on the GCX would increase marketing opportunities for rice farmers as well as address post-harvest loss issues and their lack of financing, which are key industry concerns,”

Rice has increasingly become the most consumed food staple in the country after maize. The country’s annual rice import bill, which is about 50 percent of rice consumed, currently stands at about US$1 billion, mainly to supplement consumption gaps left by domestic production.

In view of this, under the planting for food and jobs, government through the Ministry of Food and Agriculture and the private sector players have undertaken measures to boost the domestic rice value chain to satisfy 100 percent of local demand by 2025.

It is estimated that about 1.2 million metric tonnes of rice would be produced in the 2020/21 harvest year. However, just about 750,000 metric tonnes were produce during 2019 crop season.

The GCX Warehouse Receipt Financing Scheme will also benefit rice farmers who can leverage their produce to obtain capital from banks at reasonable rates which can then be reinvested into their agribusiness ventures.

1bn people to have access to 5G by end of year – report

By Eugene Davis

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ore than one billion people are expected to have access to 5G connectivity by the end of 2020, the 2020 Ericsson Mobility Report has revealed.

The significance of the 5G wireless technology promises to not only increase availability and a more uniform user experience to users but provide higher performance and improved efficiency.

The Vice President at Ericsson - Middle East and Africa (MEA), Todd Ashton indicated that by 2026, the technology is expected to record 3.5 billion 5G subscriptions across MEA. Speaking at a virtual programme on the Ericsson Mobility Report 2020, which was released this month, he also revealed that mobile data traffic in Sub-Saharan Africa is estimated to grow by almost 6.5 times the current figures, with total traffic increasing from 0.87EB per month in 2020 to 5.6EB by 2026.

5G technology will provide a range of network improvements, including low latency .and

capacity enhancements The report also states that average traffic per smartphone is expected to reach 8.9GB over the forecast period.

As the demand for capacity and coverage of cellular networks continues to grow, service providers are expected to continue investing in their networks to cater for this uptake and meet evolving consumer requirements, Mr. Ashton noted.

The report also revealed that the pandemic has impacted the 5G premium but 1 in 3 are

still willing to pay a 20percent premium.

“81% of consumers plan to spend on at least one digital service despite the pandemic” the report captured.

Among the reasons, consumers will be eager to take up 5G includes video on demand, cloud gaming, mobile music, live sport streaming, digital live events, immersive education –with 63% of non 5G users feel new exclusive apps and services will convince them to take up 5G as well.

It is also expected that 70% of

Todd Ashton is the VP at Ericsson MEA, the digital service providers plans to accelerate 5G in Africa

the 5G digital services spending will be driven by mobile gaming.

In Sub-Saharan Africa, mobile subscriptions will continue to grow over the forecast period as mobile penetration today, at 84 percent, is less than the global average. LTE is estimated to account for around 15 percent of subscriptions by the end of 2020.

The Mobility Report reiterates the importance of releasing more spectrum in Africa to expand coverage, improve network quality and encourage mobile adoption.

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MPS positions for AfCFTA as it builds capacity for “Tema Industrial City”

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eridian Port Services Limited (MPS) and EIFFAGE Génie Civil have reached an agreement to extend the original FIDIC Yellow Book Contract to include land works for the fourth new berth of the MPS Terminal 3—which is part of Phase 2 of the Tema Port Expansion Project.

Over the past two years, EIFFAGE has devoted its effort to complete Phase 1 of the Tema Port Expansion Project and has successfully laid 41.5 million pavement blocks on the first 98 of the 127 Hectares on land reclaimed from the sea. The works included drainage, wastewater treatment plant, water & fire hydrants, electrical and IT fibre networks, 1400 reefer container plugs and a 12 MW back-up power plant.

The marine works for Phase 2 were completed back in July 2020

by China Harbour Engineering Company (CHEC) 2 years ahead of schedule and the land civil works FOR THE 4TH New Berth are set to be completed in September 2021 which is 9 months ahead of the MPS contractual commitment.

During the contract exchange meeting, the Contract Manager of EIFFAGE, Mr. Mohammed

Juma, revealed that the contract extension entails building the yard from the reclaimed land level by the marine contractors to the final pavement including the formation of pavement layers with all the required datanetworking, electrical, drainage, lighting and mechanical services etc.

The land works covers 4.2 ha right at the terminal’s waterfront (400m along the quay wall by 105m deep into the yard) stretching the MPS Terminal 3 quayside to 1,400m at dredged level of -16.90 m CD which will make the 4th New Berth fully operational (400m long).

Upon successful completion, the estimated total annual handling capacity of the MPS Terminal 3 will be in the range of 2.5 million TEUs where the actual volume handled in 2020 is in the range of 1.2 million TEUs. Boosts terminal capacity for transhipment Transhipment remains a key goal for ports in the region as West Africa still lacks a welldeveloped transhipment hub.

MPS Terminal 3 of Tema Port has on this premise raised the bar to

cater for this need.

With improved handling capacity and a comparative advantage with the worldrenowned transhipment hubs; MPS continues to put Ghana on the map in the maritime sector thus making a strong case for recognition as the hub of West Africa.

“This state-of-the-art terminal and its enhanced capacity are purposely aimed at catering for the anticipated volumes increase that will come in as more shipping lines realise the added value that MPS Terminal 3 contribute to their market range and share of the West African trade volume,” said Mr. Mohamed Samara, MPS’ Chief Executive Officer.

The container shipping industry is rapidly transforming, and it takes those who are keen on staying ahead to respond to this evolution and realise how much they can harness from what is developing around them.

Ghana and the industrial port city of Tema presents huge potential for growth in the maritime sector as it is poised to attract more business as general trade and industry picks up in the country.

Readies for AfCFTA take off From the onset, MPS has

invested in Ghana’s economic growth and connectivity to the world and for many years to come with obvious knock-on effect on the region’s economy. The new port facility is taking Ghana’s leadership one step further and positions it as an economic power and a leading economy in Africa, scaling up growth and employment in Ghana as well as within the whole Western African region.

Come next year in January 2021 when trading officially begins on the AfCFTA platform, Ghana is already ready in the area of logistics and specifically port infrastructure. The added capacity that will be present by the completion of the 4th New Berth during the 2nd half of 2021, a year ahead of schedule, will further boost Tema Port’s capabilities to contribute to the success of AfCFTA. Being one of the strongest emerging economies in West Africa (2nd largest) with a sturdy growth rate and burgeoning youthful population, many industrial companies have taken advantage and started to set up shop in Ghana to prepare for their penetration into the wider African market. This is bound to be a game changer for the model maritime nation.

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Feature

WEDNESDAY DECEMBER 16, 2020

How clean is the air in your office?

R

aefer Wallis is a man very much in demand.

An unassuming Canadian, he is widely regarded as a leading global expert on healthier buildings, and specifically, the quality of their interior air.

Due to the coronavirus pandemic, he says he has seen requests for his services from around the world soar tenfold this year.

“Since Covid the rush for indoor air quality improvements has gone through the roof,” says Mr Wallis, who is also a practising architect.

Prior to coronavirus turning us into home workers, many of us worked in modern office buildings that don’t have windows that open.

Instead, the flow of fresh air is determined by a centrally controlled heating, ventilation and air conditioning (HVAC) system.

As the Covid-19 vaccines continue to be rolled out in the months ahead, more and more of us are going to be returning to working in such offices in 2021, at least some of the time, whether we like it or not.

For firms and their employees, this means an increased focus on the HVAC system in their buildings, not just in terms of the virus that causes Covid-19, but the common cold and other

airborne bugs that might be being blown around on the ventilation system’s jet streams.

Does your office building have any technologies in place to monitor and filter out these and other contaminants? And is enough fresh air being pulled into the building from outside?

“The more unknown something is, the scarier it gets, so air quality is like the monster in the closet,” says Mr Wallis, who is the founder of air quality monitoring business Reset.

“But the more you learn, the less scary it gets. Once you know what the problems are, you can apply the right solutions.”

His business tests and certifies sensor-based systems that enable firms to monitor the air quality in their offices, both in terms of viruses and other pollutants, but also carbon dioxide levels. We all breathe out CO2, but if amounts are even slightly raised, numerous studies show that it can impair a person’s thinking and decision making.

“Imagine three people sitting in a mid-sized conference room,” says Mr Wallis. “[Without proper ventilation] it can take 45 minutes for CO2 to reach a level whereby the brain starts to be impaired.

“And if at least one of those people are sick, it could take between five and 30 minutes for them to produce enough virus

particles to contaminate the other two.”

Mr Wallis adds that most HVAC systems are designed to replace all the air in a building every 20 to 30 minutes, pumping used air outside, and pulling in fresh.

However, he says that with Covid the recommendation is to increase that to every 10 to 15 minutes.

Christian Weeks, boss of US air purification business enVerid, says they have seen “unprecedented amounts of enquiries” this year.

His says that his firm’s technology, which attaches to a building’s HVAC system, removes viruses and other contaminants using “sophisticated sorbents [absorbent materials] to scrub the air... at the molecular level”.

Danny Bluestone, the founder of UK website design business Cyber-Duck, says he is increasingly aware of the need to ensure his staff have the best possible air quality when they start to return to working in the office next year.

“We employ about 60 to 70 people, across two buildings, plus some working overseas,” he says.

“As most staff have been working at home this year, I have been in one of the offices pretty much on my own since March.

“And since then I haven’t been ill once. I have not been around anyone with germs, so it really

does make you focus more on the air quality in the office.”

He says that the firm recently installed better HVAC systems for summers, and has ensured that windows can be opened at other times of the year, to allow more natural ventilation.

But what should a company, or building owner, do if there is air pollution outside? Israeli firm ClimaCell sells software systems that track such pollution, and can be used to inform HVAC systems to increase the purification of air being brought into the building.

“We’re now having more conversations about air quality, and we know that Covid is a factor,” says ClimaCell director Ayala Rudoy.

“People are generally more aware of their surroundings, and what they’re breathing in.”

Psychotherapist Danielle Sandler says that with many people nervous about having to return to the office, employers have to take any concerns about air quality seriously.

“Never before have we seen so much anxiety... and many employees haven’t been back to the office for more than eight months,” she says.

“So it’s really important that firms are sensitive... when we do eventually transition back to the workplace.”

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WEDNESDAY DECEMBER 16, 2020

Accra, World’s major cities on track to keep global heating to 1.5°C

C40 Regional Director for Africa, Mr. Hastings Chikoko

C

40 Cities today released new analysis of climate action plans from 54 cities confirming they will deliver their fair share of greenhouse gas emission reductions to keep global temperatures to the 1.5°C target of the Paris Agreement - the level that scientists agree is needed to tackle the global climate crisis.

The analysis includes reviews of comprehensive new plans from 14 cities - Montreal; Vancouver; Buenos Aires; Curitiba; Guadalajara; Medellin; Rio de Janeiro; Salvador; São Paulo; Mexico City; Milan; Lisbon; Dakar and Johannesburg.

The data confirms that when fully implemented, these climate action plans will protect residents, create jobs, address inequalities, and tackle the global climate crisis.

C40’s research reveals that efforts by these world leading cities will prevent at least 1.9 gigatonnes of GHG emissions from being released into the atmosphere between 2020 and 2030, equivalent to half the

combined annual emissions of the EU’s 27 member states.

The new analysis was presented today by Mark Watts, C40’s Executive Director, at a landmark event hosted by Mayor of Paris, Anne Hidalgo, to mark five years since the signing of the Paris Climate Agreement.

Cities with climate action plans reviewed by C40’s Deadline 2020 programme and confirmed as having science-based targets consistent with the Paris Agreement goals include: Los Angeles, Boston, Houston, New York City, Portland, Seattle & Washington D.C., USA; Vancouver & Montreal Canada; Mexico City & Guadalajara, Mexico; Curitiba, Rio de Janeiro, Salvador & São Paulo, Brazil; Buenos Aires, Argentina; Medellin, Colombia; Melbourne, Australia; Stockholm, Sweden; Oslo, Norway; Copenhagen, Denmark; Barcelona, Spain; Paris, France; London, UK; Amsterdam & Rotterdam, the Netherlands; Milan, Italy; Lisbon; Portugal; Accra, Ghana; Durban & Johannesburg, South Africa; and Dakar, Senegal.

Amongst the details contained in the climate plans reviewed

by C40 are the following: ● In Mexico City, more than 100km of public transport corridors and 4 new cable car lines will be open by 2024, providing better access to essential services for low income communities. ● In Dakar, the city will improve flood management, protecting citizens and livelihoods by including climate risks in urban planning. ● In São Paulo the city will incentivise and prioritise local and organic food production, providing residents with access to affordable and quality food. ● In Johannesburg, by 2030, all new public and private buildings will operate at net zero carbon, generating hundreds of jobs. ● In Buenos Aires, 100,000 new trees will be planted by 2025, helping clean the air all porteños breathe. ● In Milan, the city will reallocate 100km of street space for cycling and walking by the

end of 2021, delivering a green and just recovery to the COVID crisis. ● Lisbon will multiply its production of solar energy by 50 by 2030, ensuring the energy transition ends energy poverty and benefits all city residents.

C40’s Deadline 2020 Programme, launched in 2016, is working with cities around the world to develop and implement climate plans which will deliver action consistent with the objectives of the Paris Agreement – an integrated and inclusive plan that addresses the need to reduce greenhouse gas emissions, adapt to the impacts of climate change, and deliver wider social environmental and economic benefits. This work is made possible with the generous support of the UK Government, the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU), the Danish Ministry of Foreign Affairs (DMFA) and the Children’s Investment Fund Foundation (CIFF).

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America’s dormalcy delusion

By Jorge G. Castañeda

U

S President-elect Joe Biden made a “return to normalcy” one of his election campaign’s leitmotifs.

After four years of President Donald Trump’s bald-faced lies, juvenile bullying, gratuitous cruelty, and perilous volatility, it was certainly an appealing promise. But, as Biden himself has admitted, the world is not what it was in January 2017, when Barack Obama’s administration – in which Biden served as vice president – left office. So, to what exactly is he planning to return?

To be sure, Biden can certainly restore a sense of decorum and decency to the US presidency.

But on concrete policy issues – especially foreign-policy issues – the status quo ante will be far more difficult, if not impossible, to revive.

Biden has pledged to recommit to some of the Obama-era international agreements that Trump abandoned, beginning with the Paris climate agreement and the Joint Comprehensive Plan of Action ( JCPOA, better known as the Iran nuclear deal). Moreover, he intends to extend the 2010 New Strategic Arms Reduction Treaty (New START) with Russia, rejoin the World Health Organization, and re-engage with Cuba. He may also join the successor to the Trans-Pacific Partnership (TPP), the mega-regional trade deal which Obama negotiated and Trump rejected.

Recommitting to the Paris agreement should be the simplest of these actions. It never acquired treaty status, largely because Obama knew the Republicancontrolled Senate would never approve it. That is why Trump was able to withdraw from it without a congressional vote; he simply had to abide by the oneyear waiting period stipulated in the text. Likewise, Biden could

rejoin without congressional approval, after only a 30-day waiting period.

The rest of these efforts, however, will be fraught with difficulties. The JCPOA is a case in point. Though it, too, was not ratified by the Senate, unilaterally lifting economic sanctions on Iran (mainly on oil sales) would create a furor among congressional Republicans, whom Biden needs to fulfill other promises. Israel, too, would be incensed. The move may even raise a few eyebrows in Europe.

Critics argue that the JCPOA imposes insufficient limits on Iran’s nuclear-enrichment capabilities, and leaves out critical issues – namely, Iran’s ballistic missiles and, more important, its support for the region’s antiIsraeli, anti-American forces (like Hezbollah) or regimes (such as in Syria). Without some changes, the agreement will most likely remain moribund.

Any effort to reinstate Obama’s normalization policy with Cuba will face similar challenges. This approach implies a fully staffed US embassy in Havana, no travel or remittance restrictions, and the revival of cruise-ship visits and airline connections to the island. It would also entail as much investment and trade as possible under the US embargo that has been in place since 1961 (which will not be lifted by the Biden administration).

Biden would presumably not ask Cuba for anything in return.

After all, Obama reached a deal with the Castro regime in 2015 only because he included no concrete conditions relating to human rights, democracy, economic reform, or significant Cuban cooperation in Latin America.

But, as the last five years have shown, Cuba will not address these issues on its own. In a recent interview, former US Secretary

of State John Kerry, speaking on Biden’s behalf, confessed that Cuba’s progress on human rights and economic reform since 2015 has been “disappointing.” In fact, human-rights conditions have deteriorated and the number of political detainees has increased.

Meanwhile, the humanitarian crisis in Venezuela, where Cuba wields enormous influence, has worsened considerably, with no solution in sight.

Against this background, attempting to normalize relations with Cuba would be politically risky. In the election, Biden performed significantly worse among Cuban-Americans in Miami, which accounts for more than 10% of Florida’s voting population, than Hillary Clinton did in 2016. Moreover, Biden may need the support of Florida Republicans, such as Senator Marco Rubio, to fulfill his promise of creating a path to citizenship for 11-12 million undocumented immigrants.

Moreover, though Biden has made no promises regarding Venezuela, he will have to make several crucial decisions on this front almost immediately after his inauguration. Will he maintain economic sanctions against the country and its state-run oil company, Petróleos de Venezuela, S.A.? Will he recognize Juan Guaidó, the opposition leader who swore himself in as interim president in 2019, as the country’s legitimate head of state? Will he disregard the results of the farcical National Assembly elections that were held on December 6?

In other words, will Biden broadly uphold Trump’s Venezuela policy (excluding the hare-brained coup schemes concocted by American and local cowboys)? Or will he seek another way to address the country’s severe humanitarian crisis?

Returning to Obama’s policy of “benign neglect” – a reasonable

position at the time – would be problematic today.

Finally, there is the question of Asia-Pacific trade. Biden has not pledged to join the TPP’s successor, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), created after Trump’s withdrawal by the 11 countries that negotiated the original agreement with Obama. Nor has he announced plans to renegotiate it.

Biden has, however, said that he thought the TPP was not a bad deal for the US, though he may ask for further labor and environmental provisions. If he wants to revive Obama’s “pivot to Asia,” and work with allies to contain China in the region, joining the CPTPP would be a good start. But this must be approached less like a return to the past than a step into the future.

Herein lies the fundamental challenge for Biden: how to revive useful multilateral agreements or foreign policies, while recognizing the myriad ways the world – and America’s reputation – has changed in the last four years. There can be no “returning” to the past, but only adaptation of US objectives and strategies to current conditions.

The sooner Biden’s foreign-policy team recognizes this, the better.

About Author

Jorge G. Castañeda, a former foreign minister of Mexico, is a professor at New York University and author of America Through Foreign Eyes.

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